New conditions for trade with Jamaica, Libya and Iran

Since 1922 EKF has been building up unique expertise in the challenges faced by Danish companies in trading and investing around the globe. Our commitment to giving Danish exporters optimum protection means that we maintain a continual country-watch on individual national developments. Most recently, conditions have changed in Jamaica, Libya and Iran.

Indhold kolonne 1

Indhold kolonne 2

Indhold kolonne 1 række 2

Indhold kolonne 1 række 3

Indhold kolonne 2 række 2

Indhold kolonne 2 række 3

​20 July 2012

Jamaica given less favourable risk-ratingThe OECD and EKF regularly assess the financial and political risks of trading and investing in countries worldwide. The safest countries are ranked under risk classification 0, while the least safe are assigned to risk classification 7. At the meeting of the OECD country group on 27 June 2012, risk classifications were assigned to countries in Latin America. Of these, Jamaica alone was assigned to a new risk level, taking it from country risk classification 6 to 7. The poorer risk assessment for Jamaica is attributable primarily to the country's very high, and still increasing, national debts.

National export credit agencies have an obligation to comply with an OECD downgrading, but not necessarily an upgrading.

EKF’s own cover policy for Jamaica has not been altered as a result of the OECD downgrading, but the reassignment to country risk classification 7 means that EKF is now obliged to charge a higher premium for risk cover in Jamaica.

EKF reintroduces cover for LibyaEKF is also keeping a close eye on Libya, and concludes that the security situation, while still uncertain, is showing signs of improvement. With its oil industry almost restored to full-capacity production, the financial means are in place for rebuilding the country, and a number of European export credit agencies have already reintroduced, or will shortly be reintroducing, Libya cover, although primarily for short-term transactions.

Given this improvement, EKF has decided that with due caution it is now in a position to offer guarantee cover for Libya.

The existing suspension will be lifted solely for short term transactions, i.e. credit terms of up to 12 months and subject to a letter of credit for private-sector buyers and a sovereign guarantee for public-sector buyers. EKF's suspension of guarantee cover for medium/long-term credit facilities and reinsurance of private-sector credit insurers will remain in place.

The EKF country mandate has been set at DKK 100m, and based on a maximum individual transaction value of DKK 10m.

EKF guarantee cover for Libya has been suspended since February 2011.

No guarantees for IranFor Iran, however, the position is different, since the credit risk in this country has increased significantly in recent years. Iran has been having increasing problems paying for its imports, because the Iranian nuclear policy has isolated the country politically and economically. UN, EU and US sanctions have taken their toll not least on the Iranian financial sector, most recently with its exclusion from the global SWIFT payment system.

Like other export credit agencies, EKF has registered an increasing number of defaults on payment under existing guarantees, and has no expectation that new guarantees will be honoured.

In view of this situation, EKF has found it necessary to suspend its guarantee cover for Iran.